The Marine and Yachting Association of Grenada (MAYAG) and the Minister of Tourism, the Honorable Alexandra Otway-Noel, presented the findings of the completed Economic Impact Study of Grenada’s Marine and Yachting Sector at a recent press launch.
The results show a competitive product, performing well, with significant room for further development. It also highlighted the sector’s high level of economic contribution and high-skills job creation.
Isla Consulting is proud to have supported the implementation of the study, which was conducted by Dr. Andre Henry.
The attached synopsis summarizes the most pertinent findings (click here).
Grenada’s real estate market is stagnant, with 2nd quarter transactions showing no indication of improvement. The only observed positive indicator is an upward trend in power-of-sale (foreclosure) transactions .
While compulsory sales are representative of a troubled economy, and often cause intense personal suffering, in this case the trend appears to provide the first indications of a “bottom” for a very distraught real estate market. Discount seekers are typically the first re-entrants into a distressed market.
- Lenders are becoming increasing innovative and aggressive in bringing distressed assets to market.
- There is increased interest in purchasing distressed assets.
- Lenders are accepting offers that are in-line with what the market will bear.
The Grenada Hotel & Tourism Association recently launched its Farm-to-Table initiative, highlighting Grenada’s abundant fruit and vegetables, fresh fish, organic poultry, free range eggs, locally produced goat cheese, and much more.
Isla Consulting & Advisory is playing an active role in supporting this initiative, as it is central to differentiating Grenada’s tourism product. Thanks to the Calabash Hotel for a wonderful setting and some fantastic food created from local ingredients.
Isla Consulting & Advisory is pleased to provide the Grenada Real Estate Report for the 1st quarter of 2013. The report is a summary look at Grenada’s real estate market, compiled from the most up-to-date and accurate real estate database.
While the outcome of the recent general election combined with the stated policy initiatives of the new government have certainly increased the interest in Grenada’s real estate product, this has yet to propel the market. Isla expects that it will be the 4th quarter of 2013 before there is any notable increase in the number and value of transactions (though some gradual improvement is expected throughout 2013).
This recent report notes a considerable decline in the average value of transactions, showing a reduction of 44%. Market activity is currently clustered at the lowest range of real estate values.
I hope that the report is of value to you. Please contact me to discuss the information provided or to chart the best course for your real estate investment.
Isla Consulting is pleased to launch its Grenada Real Estate and Development Snapshot. This report will be available quarterly and will be automatically sent to all blog subscribers.
Quantitative analysis provides Isla with accurate insight on where the real estate market has been and where it is going. The report is a glimpse into some of the data regularly collected and maintained by Isla Consulting.
“Grenada’s island-wide real estate transactions for the 4th Qtr of 2012 remain depressed and heavily clustered in the parish of St. Georges (both in volume and value). The greatest number of sales involved vacant property at the lowest end of the transaction values…
The frequency and dollar value of transactions were densely clustered between EC$0 – EC$400,000 (US$0 – US$150,000), accounting for 87% of the number of total transactions and 42% of the total dollar value. It is of note that the four largest transactions were equal in value to the 96 smallest transactions…”
[ Download or view the report 2012 4th Qtr_Final]
Grenada Grenadines Yachting has just released this fantastic video on the country, its people, and its marine and yachting product. Please enjoy.
If you are interested in participating in this destination marketing initiative please consider the following:
- Send an e-mail blast to your friends, colleagues, and clients and with the link to the video https://www.youtube.com/grenadayachting
- Place on Facebook Wall/Timeline of all your Facebook pages and encourage comments and sharing.
- Tweet about the video. Make sure to include the “hash tag” #Grenada_Yachting in the message. For example: Great video on #Grenada_Yachting have a look [add link]
- Embed the video in the home page/blog/news/what’s happening on your company website
- Place the video on all of your social media pages (Pinterest, Google+, others) and encourage comments and sharing.
- Reach out to 5 industry colleagues and ask them to do all of the above.
Grenada’s real estate and construction sectors are stagnant. Total monthly real estate transactions for the entire country are currently averaging EC$7M (US$ 2.6M). This is equivalent to the sale of one villa in many of our neighboring islands. It is unsustainable, and gives a clear indication of the intense need for policy intervention to shore up real estate values, stimulate construction, and create jobs.
At the recent Caribbean Growth Forum, Grenada’s Minister of Finance, Nazim Burke, summarized the challenge succinctly when he said “Four years after the start of the Great Recession, politicians, policymakers, priests and people, the world over, share a common quest… Accelerating economic growth and creating jobs.”
Previous articles have dealt with potential policy measures, including the removal of the punitive tax on non-Grenadians when buying/selling real estate, and the potential for attracting foreign retirees. However, the current and future market realities will require a broad spectrum of policy tools to achieve sustained growth and job creation, and in particular, in creating the necessary infrastructure to attract high-net-worth buyers to invest in Grenada.
Few policies have been more effective in attracting this thin population-sliver than Citizenship by Investment (CBI). Various iterations of this policy have been used in a range of countries around the world including, Canada, the United States, the United Kingdom, Austria, and a host of others. The Caribbean includes two countries that offer CBI programs, Dominica, and St. Kitts and Nevis, while a third country, Antiqua and Barbuda is currently working towards the implementation of their own CBI program.
One constant among all of the countries that have implemented CBI programs is that the policies are country-specific. In other words, there is a vast difference between what has worked in Canada and what has worked in Austria.
One other commonality is that the programs work. They attract high caliber applicants who are willing and able to pay significant sums to gain a second citizenship. This adds up to major government receipts and significant foreign direct investment. Prime Minister Spencer, of Antigua and Barbuda announced at a recent media event that his country’s Citizenship by Investment Taskforce “projected that by the end of the third year, the programme could yield a gross investment in excess of EC $550 million” (Caribbean360)
The potential for such a program to create jobs and stimulate the economy in Grenada cannot be overstated.
Any such program or government initiative will need to be carefully designed to ensure that it serves to promote sustainable and inclusive growth and development in Grenada. Implementation will also be critical, as no one will benefit from a poorly implemented program. If properly designed and implemented, this is a short-to-medium term program that could make a significant contribution to accelerating economic growth and creating jobs in Grenada.
The beauty of the La Luna Estate development is in its location, the design, the quality, and the scale – it is small. Not the villas themselves, which average 5,000 sq/ft, or the building sites, averaging one acre, but the size of the overall development. When completed, the project will contain 7 villas on 5 acres of land. Future phases will grow the project to 27 villas on 25 acres, but this growth will be gradual, allowing each phase of the development to mature and appreciate. Such relative “smallness” is an ideal fit for Grenada, and offers a long list of distinct advantages.
The development is very low density. This ensures that the owners and visitors are a welcome part of the surrounding beaches and communities, without being overwhelming. It is also in keeping with the residential composition of Morne Rouge (the surrounding community) and much of Grenada.
All construction works were done using local construction professionals. In fact, the quality of the finished construction is of such high quality that the builder is entertaining potential regional projects. When operational, the La Luna Estate villas will be supported by 100% Grenadians. This includes management.
Furthermore, small is “do-able”. Grenada has a long history of falling short at delivering large project developments. This challenge has become a regional reality as capital has become scarce and buyers skittish. Large hospitality projects require significant capital outlay, often requiring more than 10 years before any return on investment. Grenada’s limited visitors, lack of international recognition, and high cost structure serve to significantly magnify this situation. Yet despite these challenges, La Luna Estate has been successfully built during the worst recession in history. This is strong evidence that bigger is not always better.
None of the accolades being paid to La Luna Estate come at the expense of the ongoing and planned “large” projects in Grenada, including Sandals, The Four Seasons, and Port Louis. These flagships projects will form the foundation of the country’s luxury tourism product, garner international recognition for the island, and support critical airlift. They are an integral part of the tourism product, and will make significant contributions to the country’s development. But sustainable, inclusive development will require a balanced approach that recognizes and supports a range of product.
It is hoped that the current and potential contributions of small properties and developments are not overlooked, as they are paramount contributors to Grenada’s prosperous and sustainable development.
Grenada Missing the “Boom”
The competitiveness and innovation required to compete, much less thrive, in the modern world continues to increase. In few sectors is this more glaring than tourism. Grenada and many of the Windward Islands are particularly challenged by the high cost-structure of their aging tourism products, competing for an increasingly price sensitive short-stay visitor (less than two weeks), with ever more limited marketing budgets.
One of the most creative solutions to this quandary is the use of incentives to attract foreign retirees, in particular US and UK Baby Boomers, to take up long-term residency, and even citizenship.
While statistics on the US and UK baby boomer populations have become virtual platitudes, several are worth repeating:
- A baby boomer is a person who was born between the years 1946 and 1964, during the demographic post-World War II baby boom. (Wikipedia)
- In the US, the oldest of this population-spike numbers 76mill, nearly 8% of the population, and has begun to enter retirement age.
- In addition to being a demographic anomaly, “boomers” are also an economic one in the concentration of wealth and above average incomes, with US baby boomers earning “about $3 trillion in annual income” (Reuters)
- A US baby boomer’s annual average income is $ 75,000, nearly double that of the to the US average of $46,326.
- This relatively small segment of the US population controls “ 67% of the country’s wealth, or US$28 trillion” (U.S. Census and Federal Reserve)
- And most notable for Grenada and the Caribbean – Baby boomers purchase 80% of the luxury travel. (Huffington Post)
While these trends and statistics may be well know, less well known are the programs many neighboring Latin American countries have been putting in place since the 80’s to attract foreign retirees to their countries to live out part, or all or their retirement. Countries such as Ecuador, Mexico, Honduras, Costa Rica, Panama, Colombia, Belize, Nicaragua, Chile, and Brazil, have incentives and strategic initiatives aimed at attracting and retaining these extended-stay visitors, with many inviting them to become residents and even citizens.
* Costa Rica, having established itself as a prime retirement destination, has removed many of the enticements which were previously available, such as duty-free importation of a vehicle and personal belongings.
In addition to the above, a host of other countries are successfully promoting similar programs to entice quality retirees to become residents or citizens. The list of countries includes Australia, the Philippines, France, Uruguay,and Argentina.
The benefits received by the host countries from attracting these pensioners to live part-time, or full-time go far beyond the influx of foreign direct investment and employment generation. Pensioners are often active in volunteer organizations, church groups, and community development. They tend to be active and influential “ambassadors”, spreading the word on the merits of their adopted homeland. And they are the only tourists that actively attract more tourists, through repeated visits from friends and family.
Any concerns that implementing a foreign retiree program in Grenada would cause the country to be overrun by non-national should be assuaged by the reality that cost of living is often a driving factor in the selection of an international destination for retirees. Other key factors include the availability of first-world medical care, inexpensive and readily available airlift, and entertainment. Clearly Grenada will not be the first choice for a large portion of this segment. However, Grenada is not without its charms, and there is certainly a growing group of retirees that could be attracted to spend considerable time and money in Grenada throughout their retirement years.
The prevalence of these programs and the positive results they have generated in attracting quality visitors and foreign direct investment begs the question: “Why is there no such program in place in Grenada?”
As a footnote, the number of US baby boomers is nowhere near its peak, and will continue to grow by approximately 1 million per year until around 2050, when they will make up 21% of the US population.
*The above information was compiled from The Global Property Guide